Google Algorithm Altered: Less Emphasis Placed on Anchor Text

Patrick Altoft blogged a recent finding that Google seems to have changed its algorithm and placed less emphasis on anchor text (versus on-site optimization). His theory (which is purely from observations at this point) is that Google is altering the algorithm because anchor text is currently the ranking algorithm's biggest flaw. There are a variety of reasons for this but Patrick specifically notes that the "best" link (as deemed by Google) for anchor text may not be the most ideal one after all.

Forum members are overall interested in this discovery and related developments. Since it may help thwart spammers, this may be a good direction for the algorithm to be headed. However, it may be related to the number of backlinks from a single source, as one forum member says:

It is more likely that Google would reduce value of backlinks with the same anchor text that come from the same domain, ie having 1000 backlinks from one domain using same anchor text could be worse than having 2-3 backlinks from the same site.

On the other hand, it may be that Google is starting to be a lot more privy to semantic indexing and matching up similar keywords with other anchor text. However, it's debatable that this is the case if Google is trying to reduce emphasis on anchor text altogether -- which makes sense in many cases (including in the paid links scenario which the blog post did not touch upon).